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Next Phase of Canadian Vehicle Emissions Rules Maintains Harmonization with U.S.

OTTAWA--Federal Environment Minister Peter Kent announced Nov. 27 that the
next phase of proposed restrictions on greenhouse gas emissions from passenger
vehicles and light trucks in Canada will impose progressively more stringent
standards over the 2017-2025 model year period.

The proposed
regulations, to be finalized in 2013, are expected to reduce per-vehicle
emissions by nearly 50 percent by 2025 compared to 2008 models and to reduce
Canada's overall GHGs emissions by 162 million metric tons over the 2017-2025
period, he said.

The regulations continue the government's sector-by-sector approach to
reducing GHGs emissions, building on regulations in place for the 2011-2016
model years, Kent said in a statement (224 WCCR, 11/17/11).

“These actions prove that we can both tackle climate change and save at the
pump,” he said. “Since these proposed regulations align with the stringent
standards of the United States, they will not only deliver important
environmental benefits, but they will also keep our manufacturers competitive.
And that will protect Canadian jobs.”

A spokesman for the environment minister told BNA that draft regulations are
expected to be published for public comment within a week in the Canada
Gazette.

U.S.-Canada Cooperation Imperative

The integrated nature of the North American automotive sector makes it
imperative for Canada to cooperate closely with the United States, and that is
consistent with the overall goals set by the Canada-U.S. Regulatory Cooperation
Council, established in February 2011 by Prime Minister Stephen Harper and
President Obama as part of the “Beyond the Border” agreement on North American
perimeter security and competitiveness, Kent said.

“As the race for better fuel efficiency continues to drive increased global
competition in the auto sector, Canada and the United States have worked
together so that North America can have a common, long-term approach,” he
said.

Kent noted that initiatives undertaken to date by Canada's federal,
provincial, and territorial governments, as well as consumers and businesses,
are expected to generate half of the government's Copenhagen Accord target of
reducing GHGs by 17 percent from 2005 levels by 2020.

Canada's major automotive manufacturers fully support the proposed
regulations, particularly as harmonization with U.S. standards allows for
greater efficiencies of scale and permits the leveraging of additional costs
across the entire industry, Mark Nantais, president of the Canadian Vehicle
Manufacturers' Association, said Nov. 27.

“This is the most significant federal action ever taken to reduce greenhouse
gases and improve fuel economy,” Nantais told BNA.

Different Requirements for Cars, Trucks

The proposed regulations would require passenger vehicle manufacturers to
reduce their vehicles' GHG emissions by, on average, 5 percent per year through
the 2017-2025 model year period, Environment Canada said Nov. 27. However, light
trucks are typically used by farmers and construction workers who depend on
their utility, so the regulations would provide short-term relief for truck
manufacturers through less aggressive annual emissions reduction requirements,
the department said in a background document.

The regulations would require light trucks to achieve, on average, 3.5
percent annual GHG emissions reductions in the 2017-2021 model year period and
then 5 percent average annual reductions in the 2022-2025 period, it said.

“This will give time for companies to find technological solutions that lead
to reduced emissions without affecting the utility of their trucks,” it
said.

Environment Canada also noted that although Canada's passenger vehicle and
light truck regulatory regime is harmonized with that of the United States,
Canada also undertook “unique” measures in the existing regulations to provide
increased regulatory incentives for advanced technology vehicles such as
electric vehicles and plug-in hybrids. Those measures remain in place for the
2017-2021 model year period and will now be offered in both countries, it
said.

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